A week ago today there were calls for a Black Monday and an economic apocalypse. CNBC had a Markets In Turmoil segment Sunday night where Maria Bartiromo and Jim Cramer agreed that the market was on a one way trip to hell. It is not a coincidence that we are closing in on the strongest week of the year.
Nothing has changed in the past week from a fundamental perspective. EU officials are still doing nothing except making statements and the ECB did nothing at their meeting. One can even argue that the situation has worsened. Most people try to explain every market movement based on news events and economic indicators. There is little need for a tortured explanation as the actual explanation is quite simple. Market sentiment swings between hysteria and euphoria. Last week we were in the hysteria stage and we are now swinging back the other way. Its that simple. Have a great weekend.